Morning Roundup

By Mark Masterson on April 8, 2024

Good morning,

Below are the news items moving markets today:

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Executive Summary:

Capital markets begin the week with an eye on the upcoming economic data.

Wednesday may be the big day as we get CPI data.  As we know, inflation data has moved higher the past few months.  Will it continue?

We’ll also get the PPI data on Thursday. 

Key Events This Week:

1. U.S. CPI Inflation – Wednesday

2. Fed FOMC Minutes – Wednesday

3. U.S. PPI Inflation – Thursday

4. Initial Jobless Claims – Thursday

5. JPMorgan Chase $JPM Earnings – Friday

6. $C $WFC $BLK Earnings – Friday

7. Consumer Sentiment – Friday

We also get a number of Fed speakers this week to comment on the inflation data.  They have been leaning more hawkish the past few weeks. 

FED SPEAKERS THIS WEEK:

*FOMC MEMBER KASHKARI (MON. 7:00PM)

*FOMC MEMBER BOWMAN (WED. 8:45AM)

*FOMC MEMBER GOOLSBE (WED. 12:45PM)

*FED FOMC MINUTES (WED. 2:00PM)

*FOMC MEMBER WILLIAMS (THURS. 8:45AM)

*FOMC MEMBER COLLINS (THURS. 12:00PM)

*FOMC MEMBER BOSTIC (THURS. 1:30PM)

*FOMC MEMBER DALY (FRI. 3:30PM)

On person who is not particularly concerned about inflation is Janet Yellen.  In her interview on CNBC yesterday she said she was confident it will decline.

• US TREASURY SECRETARY YELLEN: I’M CONFIDENT THAT INFLATION WILL CONTINUE TO COME DOWN – CNBC.

We shall see.

About those jobs…..

The jobs data on Friday was touted as extremely strong. All of the headlines focused on how the “US added 303,000 jobs in March.”

Under the hood……

• ALL of the job gains came from part-time jobs, according to ZeroHedge.
• Last month, the US added a whopping 691,000 part-time jobs while LOSING 6,000 full-time jobs.
• Over the last year, the number of full-time jobs is DOWN 1.347 million.
• Meanwhile, the number of part-time jobs is up by 1.888 million, according to ZeroHedge.

Zerohedge.com 4 8 24

This is one healthy looking chart.  Man – it is just ripping higher.

The problem is – it’s a chart of government employees.

This is part of Janet Yellen’s Fiscal Melt-up – borrow and spend – and hire government jobs.

Fred.com 4 8 24

More below…..

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Articles of Interest:

• Economy:
  • Core CPI expected +3.7% y/y in March, smallest since April 2021 and well below +6.6% peak in 2022, but disinflation trend bumpy (Bloomberg)
• Earnings:
  • S&P 500 earnings expected to increase for third straight quarter in Q1; big tech concentration, cracks in consumer resilience key areas of focus (link)
  • Strong margins from big tech expected to be big driver of Q1 earnings growth (Bloomberg)
• Markets:
  • After plunging to multi-year lows in Q1, demand for equity market protection picking up (Bloomberg)
  • Global stock market concentration hits highest in decades, raising risk for passive investors (FT)
• Geopolitics:
  • Israeli military says it has scaled back number of troops in southern Gaza (NBC News)
  • Hamas official says no progress made at a new round of Gaza ceasefire talks in Cairo (Reuters)
  • Yellen says US-China relations more stable; China reportedly willing to have further discussions excess industrial capacity and government support (Reuters)
  • Biden will warn China about increasingly aggressive activity in the South China Sea this week during summits (FT)

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Charts of the day:

Great chart below showing the make up of the market.

It’s notable how small the energy and material sector have become.  They are now just 6% combined, while tech is up to 30%

I suspect we continue to see a move towards the “real asset” sectors over the coming years….

Goldman  Sachs 4 5 24

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Quote of the day:

“Be kind, for everyone you meet is fighting a hard battle.”

― Socrates